– This is the second of three 4Q GDP readings. Third and final update is Mach 28.

The fact is that this data is terrible. GDP was supported by low interest rates, expanded money supply, massive deficits, and a reduced Social Security payroll tax which is now gone.

We are 5 years in to a lost decade and most everyone is acting as if we are in a recovery. +0.1% gain in GDP is not recovery. We are in an extended growth recession. A growth recession occurs when the economy is growing but at a pace much lower that historic trend. Since the “recovery” started these are the annualized quarterly growth rates in GDP for the past 14 quarters +0.1%, 3.09%, 1.26%, 1.97%, 4.10%, 1.28%, 2.48%, 0.08%, 2.39%, 2.60%, 2.24%, 2.33%, 4.03%, 1.46%. Historic trend is 3.25% – 3.5%.

To see the disconnect between reporting and reality consider this: As I was writing this paragraph the Bloomberg web page had a “Breaking News” item “Consumer Comfort in U.S. Improves to Highest Level This Year.” That is correct but 1) we are only 2 months into the year and 2) the reading is minus 32.8. This is Bloomberg’s own survey Index of Consumer Confidence.